I don't think the impact of the utility tax on businesses is well understood.
From the June 3, 2009 Mid Hudson Times...

More school taxes
Newburgh school district approves utility tax

By JESSICA McALEESE

Newburgh Enlarged City School District officials may have managed to keep next year's budget increase relatively low, but come Sept. 1 they will turn to a new source for generating revenue for the district.

Last week, the Board of Education authorized the establishment of a utility tax as permitted by New York State Tax Law 1212. According to the law, small city school districts may impose a utility tax of up to 3 percent on certain services such as gas, electricity and telephone.

Newburgh Assistant Superintendent for Finance Michael Pacella explained that the district decided to administer the 3 percent tax with help from the New York State Department of Taxation and Finance as a way to offset the anticipated zero percent state aid increase next year.

"We're trying to plan ahead for next year," he said. "We're not anticipating enough revenue for the district."

According to Pacella, the tax will also help relieve some of the burden on homeowners who are paying property taxes by broadening the source revenue. And while some may not agree, he said that establishing a "use tax" (payment is based on how much of a service is used) is something that the district is more than entitled to do.

"There are lots of school districts throughout the state who are doing this," Pacella said. "The Middletown School District has imposed a utility tax since the 1960s. The City of Newburgh instituted one in 1988. It's no different for us."

But for Newburgh residents like Bill and Sandra Wiseman, the difference is huge.

"As a business owner, that tax is going to be passed along to the consumer," said Bill, addressing the school board before the decision had been made. "It's a tough burden to bear."

Sandra spoke next, urging school officials and members of the board to think hard before imposing yet another tax on local residents.

"We are struggling to pay our taxes as it is," she said. "Tell us how we're supposed to do this. It's unfair."

"Nobody likes taxes," Pacella said in response. "But my job is to look for ways to fund the education system in the best way possible. If the state's not going to give us money we have to get it someplace else; we either have to cut expenses or collect money from the taxpayers."

The district has already completed the first option, Pacella said. Now it's time to turn to the second.